Local News

Rise In Gas Prices Will Not Hurt Consumers, Businesses In Long Run

Posted March 1, 2000 6:00 a.m. EST

— Everyone is digging a little deeper in their pockets to pay for a tank of gas, but a local economist says the rise in prices at the pump will not break the bank in the long run.

Mike Walden, an N.C. State economist, says the 1970's gas crisis resulted in more fuel-efficient engines.

"For every dollar of output produced in the economy today, that dollar uses 50 percent less fuel than it did in the 1970s," Walden says.

For example, Walden says for every dollar spent on a meal, only three cents goes to oil.

Restaurant managers say they have not seen any increases, but Vaughan Adams, owner of Nowell's Contemporary & Scandinavian Furniture, has watched fuel prices go up in the furniture business.

"Within the last two or three months, all the freight companies are charging emergency fuel surcharges on the freight bills," Adams says.

However, Adams is not passing those charges onto customers, and neither are most businesses.

Walden says competition also plays a vital role.

"The average business is so competitive it has to watch its competitors," Walden says. "It has to worry about keeping its cost and prices in line."

Walden expects prices at the gas pump to come down in a couple of months.